Show and tell

On the moral high ground you live in a glass house, willy-nilly. WWF puts an ethical oar in when it invests - but its own laundry is on the line too. Peter Denton sifts through it.

What with an Enron crisis here, a WorldCom scandal there, and rumblings all around about tips of icebergs, small wonder that the ethical perspective is back at the top of the boardroom agenda. So it is too at WWF. For much of this year we have been re-examining and updating our socially responsible investment (SRI) policy, which guides our choice of companies to place our funds in. And we’ve also been asking ourselves about ourselves. If we’re to apply an ethical policy on our investments - take the moral high ground, if you like - what’s our own track record like? And who can scrutinise it?

Anyone can. Believing in the old maxim of practising what we preach, we’ve just published our third Environmental Report. This lays out, for all to see, information about our energy consumption, our CO2 emissions, our performance measures and targets, our waste record and other data concerned with our impact on the environment.

So our track record is there, for anyone to judge…not least ourselves. Our own verdict? “Trying hard - could do better.” And doing better, year on year, is our aspiration.

You could say that this practising what we preach allows us to preach what we practise. But we tread carefully - after all, any SRI policy is a virtual minefield, and none more so than when you’re leading the environmental debate. However, we’ve made ours as open and straightforward as we can.

So which companies do we choose to invest in, and why? Which won’t we invest a penny in, and why? And how we can most effectively bring about change through our investments, in company practice across the board, for the benefit of nature and the environment?

Simply stated, our overall aim is to invest in companies so that sustainable development is promoted. And we will not invest in businesses that promote what you might call “unsustainable development” - tobacco, armaments, nuclear power and the like - nor those that would offend our supporters and partners.

Having said that - and to borrow a line from the great Johnny Mercer’s songbook - we also seek to accentuate the positive. We do that best by embarking on a constructive rolling dialogue with all manner of companies and business organisations. Whenever the opportunity arises, we’ll help them in their quest for sustainability. And where we invest in them, we will use our shareholdings as a lever to influence their performance.

“Having such holdings, however modest, allows us to make strong environmental points to specifically-targeted audiences such as board members and shareholders,” explains Les Jones, WWF’s director of finance. “BP is a case in point. This year we presented a special shareholder resolution to its annual conference on behalf of a coalition of British, European, Canadian and American investors. It called on BP to disclose how it analyses and minimises the risk to its business from drilling and operating in environmentally or culturally sensitive areas. This obliged the board to address the issue, and although the resolution was defeated as expected, 11% of shareholders - a substantial number - voted for it.”

Being a charity, it is our statutory obligation to increase the value of our investments by way of a diversified portfolio. Attached to that is our objective to invest in such a way that the principles of SRI are promoted. Hence our aim to invest in companies positively concerned with sustainable development.

“And there’s no doubt that such companies are now showing the way” says Les Jones. “The world of SRI has changed almost beyond recognition since 1997, when WWF first drew up its policy. Just five years ago, ethical funds were looked upon as something for the ‘sandal brigade’ - but now they have grown enormously in size and stature and are being used directly to influence companies and their business practices. Long may it continue.”

Survival of the fittest is the rule in both the natural and the corporate environment. Through its programme work and its investment policy, WWF is uniquely placed to bring influence to bear in both camps. We intend to continue doing just that.

Peter Denton is WWF’s principal writer.

WWF’s environmental report, which has been externally verified, can be downloaded from the website. For more information about WWF’s socially responsible investment policy, contact Les Jones on 01483 426444; ljones@wwf.org.uk.

30 October 2002

Peter Denton